Is a Costco Membership Really Worth It?

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It’s common knowledge that buying in bulk can save you a ton of dough.

In fact, being unable to afford to stock up on discounted household must-haves is part of what keeps you broke.

But if you’re really strapped for cash, facing down the extra expense of a Costco membership can be daunting, even though it’s only a small amount in the long run.

And even if you can relatively easily afford it, that extra fifty bucks is still fifty bucks. It could buy a concert ticket, cover a date night or even pad your retirement account.

Do you really want to spend it on the mere right to walk through the doors of a warehouse store?

Is a Costco Membership Worth It?

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Whether or not Costco’s cover charge is worthwhile depends on your situation.

The money itself can mean more or less depending on how much of a stretch it is for your budget, of course… but that’s not the only factor.

To figure out whether paying the membership fee would be a savings or a needless splurge, you’ve got to examine your purchasing needs and behaviors — and match them up with the goods and services Costco has to offer.

How Much is a Costco Membership, and What Do You Get?

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So how serious is this barrier to entry, anyway?

Costco’s regular, entry-tier “gold star” membership costs $55 per year, and you can get additional cards for your spouse, domestic partner or “anyone over the age of 18 and living at the same address.” You’ll have access to any Costco location in the world.

The business membership is also $55 per year and allows the holder to purchase additional affiliate cardholder privileges for $55 apiece and purchase goods for resale prices.

Finally, the lofty executive membership costs double its counterparts, ringing in at $110 per year. However, you’ll get “additional benefits and greater discounts,” and also 2% cash back on your qualified Costco purchases.

That means you’d have to spend $2,750 over the course of a year to earn back your membership fee in cash-back rewards, which sounds like an awful lot…

… until you realize it’s only $230 per month, an amount even the thriftiest of us surpass in grocery purchases, according to the USDA.

And the terms promise Costco will refund you the full amount of your membership fee if you’re ever unsatisfied.

That’s a pretty solid gamble, I think. But is it really worth your time and effort to sign up?

Here’s what I found out about Costco’s best deals, and when it makes sense to join.

As far as baby wipes go, Amazon and Costco are about on par with each other at about $0.02 per wipe — and both companies offer free shipping to those who pay their annual membership fees. (Reminder: That’s $99 for Prime after your 30-day free trial, as opposed to Costco’s $55.)

But if you’re shopping in person for food and other goods (like, uh, wine) in bulk, you’ll pay yourself back in diaper money at Costco faster than you can say “It’s your turn, honey.”

Plus, according to TPH’s People and Culture Manager Erin O’Neill, Costco’s baby wipes are “the world’s best.” And I believe it, too, since you can find Costco’s product listed on Amazon, where it presumably sells despite the additional expense it carries for a non-member purchasing it from a third party.

But for over-the-counter stuff like antacids, you’ll have to buy a membership. If you go through a lot of a particular OTC medication, it’ll probably pay for itself in no time.

Verdict: Yes, if it’s over-the-counter

If You Buy Organic

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Annemarie Rossi of Real Food Real Deals is “tired of feeding [her] family processed food,” and insists on buying the very best grass-fed, organic and natural whole foods available.

So she crunched the numbers to find out how much she could save on the healthy products she buys for her family of four… and the results were pretty eye-opening.

According to Rossi’s comparisons and calculations — which took budget-friendly grocer Trader Joe’s into account — her family would save upwards of $1,300 by purchasing their organic milk, eggs, chicken, diced tomatoes and other goods at Costco.

That figure makes $55 look pretty darn insignificant.

Father and blogger Marcus Kusi had a similar revelation when he purchased a Costco membership for his family of four. He’d been afraid their organic lifestyle would make the membership a waste.

“We were pleasantly surprised at how much organic food and produce Costco offers,” he told me in an email — and at much better prices than traditional grocery stores.

“It saves us a lot of money and makes Costco a weekly stop for us.”

That said, if your local Costco is a bit far away and you think you’ll need to re-up on produce more often than you can get there, you may end up just running out to your local store, counteracting some of your membership’s ROI.

Verdict: Yes, if you do all your grocery shopping at Costco

If You Live By Yourself

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This one’s tricky.

Some things are worth buying in bulk because they never go bad and you can never have too much (read: toilet paper).

But as a singleton living in a tiny apartment, even paper products are difficult for me to buy in bulk — let alone perishables like fresh produce. I simply don’t have the square footage to devote to storing it.

I’ve still considered joining, though, and if my apartment was just a little bit more spacious (and maybe 10 minutes closer to my local Costco), I probably would.

Why, you ask?

Well, aside from the obvious benefits of buying paper products and non-perishables in bulk, I’m also drawn to Costco’s store policies.

Costco’s return policy is the stuff of legend, and it’s a big enough perk on its own to earn the loyal patronage of Mark Kantrowitz, the publisher and vice president of strategy for Cappex.com, a college comparison tool.

“The Costco refund policy on its own makes the membership worthwhile,” says Kantrowitz, who once successfully returned an item a full year after its purchase date. “They stand behind the products they sell.”

And Costco’s conscientiousness isn’t just directed toward its paying customers. The chain offers its employees generous wages, even at the entry level.

It’s nice to know the money I’d save at Costco doesn’t contribute to the company cutting corners or minimizing paychecks.

Almost all of us use at least some gas, so this discount will probably help you, unless your Costco’s location is super inconvenient.

But if you have a long commute or otherwise put serious wear-and-tear on your vehicle, a Costco membership might pay for itself a lot more quickly.

That’s because Costco routinely offers up to $80 off certain brands of tires, according to frugal living blog Save Outside the Box — a savings that instantly makes up for your fee. You’ll even get free tire balancing and rotations to boot.

Verdict: Yes, especially if you have a long commute!

So: Should You Get a Costco Membership?

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Only you can decide if a Costco membership is right for your family and finances — but hopefully, we’ve given you some food for thought to help you consider all the ways Costco might help you save money.

Don’t forget to take advantage of all the discounts you’re offered — even really weird ones!

Also, just like at any other store, beware of impulse buys or great deals on stuff you won’t actually use. Just because something’s cheap — or even free — doesn’t mean you need to get it. It’s still a waste of money if it ends up in the trash.